Daggers are small stabbing weapons, useful as a secondary weapon for ranged focused characters (or poorly equipped bandits). They are also useful when trying to loot armor from opponents.

Daggers do little damage but also have no Fatigue penalty to carry and give access to the Puncture skill. Puncture can be useful against armored opponents as it will completely ignore armor, but also has 0% chance to make a critical hit.

Surrounding a well armored opponent like a Knight or Bandit Leader and puncturing him to death is a great way to obtain high end armor for free.

If you take the Dagger Mastery Perk, you will be able to attack three times in a turn either using Stab and Puncture, because they will have a reduced Action Point cost (3AP).